The e-book reader market is looking rosy with China-based vendor Hanvon Technology expecting to ship over one million e-book readers in 2011 and speculation about Sony returning to the e-book reader market in Japan.

Although the education market for e-book readers is just taking off, demand in the gift and consumer markets remains strong. With stimulation from price-cut promotions, overall sales of e-book readers are expected to exceed 10 million units in 2010.

Color Comes to E Ink Screens [Nov 7]: “… the new color E Ink display, while an important technological breakthrough, is not as sharp and colorful as LCD. Unlike an LCD screen, the colors are muted, as if one were looking at a faded color photograph. … Hanvon’s first product using a 9.68-inch color touch screen will be available this March in China, starting at about $440.”

There has been a significant decline in July and August unconsolidated E Ink Holdings (EIH) revenues, i.e. only EPD related (i.e. Hydis not included) as reported in E Ink reports revenue growth in September [Oct 11]. This is explained as “significant decreases in prices of EPDs shipped to its major clients in the third quarter, the overall revenue figures were unable to reflect the growth of EIH’s shipments in the quarter.” This actually means that with significant growth in September EIH was able to compensate the earlier revenue loss with much higher unit growth and returned to normal business growth conditions. The monthly and quarterly revenues for the last 12 months were actually (in NT$m):

Update: The Story On E-Readers: Falling Prices Sparking Rising Sales [Sept 9]. Finally an unbiased analyst view: “Amazon.com (AMZN) kicked off the price cuts when it debuted its third-generation Kindle e-reader, starting at $139, on July 28. Analysts say Amazon is selling the device at a loss, looking to make up the difference on e-book sales. In response to Amazon’s price cut, Borders Group (BGP) reduced the price of its Kobo e-reader by $20 to $129. Also, Borders’ online store has been selling Aluratek’s Libre e-reader for $99. … As a dedicated device, e-readers have several advantages over tablets. Most e-readers use low-power and black-and-white E Ink displays that have great contrast for legibility, approximating the look of text on paper. They also can be read in bright sunlight. Plus, e-readers boast long battery life. For the next couple of years, e-readers and media tablets will be able to coexist in the market, analysts say.”

Update: Taiwan’s e-book future takes shape [Sept 17]. From this article it is easy to see that Taiwan has an even bigger influence on e-paper based industry than its more than 90% share in notebooks, which is more manufacturing only oriented. Moreover: “The government has forecast Taiwan’s e-reader production will grow by NT$30 billion (US$943.46 million) in 2010 and the digital content industry will increase its business to NT$100 billion by 2013. To help achieve this goal, the IDB said, the government is planning to allocate NT$2.13 billion to boost the local industry.Taiwanese companies have also moved to tap into the mainland Chinese market. … The supply chain and reading content remain the major factors in the future of e-readers. … For Taiwan-made e-readers to dominate the global market … digital publishers should quickly beef up the volume of content and e-reader makers should offer customers a more reliable operational support system”.

Update: Foxconn e-book reader shipments expected to surpass 20 million units in 2011, says paper [Nov 1]: “Global e-book reader shipments are expected to reach 12 million units in 2010 with 80-90% of the shipments, equivalent to more than 10 million units, from Foxconn Electronics (Hon Hai Precision Industry). … As for other smaller e-book reader makers, Netronix shipped about 200,000 units in the first half and is aiming to ship 400,000 units for 2010, but the market watchers believe Netronix should be able to ship 500,000-600,000 if upstream component supply is smooth; … Qisda is still aiming to ship 400,000 e-book readers in 2010, added the paper.“

Technology holder PVI‘s share price, however, has suffered, but with Amazon announcement seems to start climbing back (you can check the actual share price by clicking on the image: [Sept 11: You could see that it has returned fast to the previous $52+ value and and remained stable so far. So the damage has been repaired by the market realities as outlined in the updates above.])

What a contrast when looking into the titles of republications in Taiwan and mainland China:

US companies are generally envying at the success of E-Ink technology and especially at the whole business ecosystem built around it by the Taiwanese Prime View International (PVI), now E Ink Holdings Inc. In fact E-Ink based e-book readers have been dominating the market since 2006. They have more than 90% share! So with 10 million e-readers shipment forecasted by E Ink Holdings for this year and 20 million for the next one (see: E-paper maker announces income spike [Aug 11]), as well as entry prices going down to US$100 by Christmas time(*) they are afraid that the tablets and slates that will begin to follow the US$500+ Apple iPad lead will have far from sufficient space to build their starting businesses upon.

Over one-half (57%) of surveyed US consumers say they plan to purchase an e-reader or tablet within the next three years—29% plan to purchase one within the next year—according to a study by The Boston Consulting Group (BCG). …

… There is a strong preference for multipurpose tablets: 53% of consumers say they would like to own a multipurpose e-reader, such as an iPad, compared with 39% who prefer single-purpose e-readers, such as Amazon’s Kindle, the Nook from Barnes and Noble, or the Sony Reader. …

… Widespread adoption will depend in part on a drop in prices: The sweet spot for multipurpose devices is from $130 to $200—far below the $499 entry price of the iPad—while the desired price for a single-purpose device is from $100 to $150. …

While the E-Ink based e-readers will be able to match that sweet spot in prices by Christmas and next year, the multipurpose devices built on other technologies could only after 2-3 years on the market. So US companies should put Fear-Uncertainty-and-Doubt (FUD) into the minds of US customers about the future of single-purpose e-readers as much as only possible. This whole communication storm is nothing less than that.

Will be interesting to watch how effective that well orchestrated effort will be. Keep in mind that the current blitz is just the beginning of a war. More will come from the US parties, and the Taiwanese multinational, E-Ink Holdings and its whole global ecosystem of partners (including the US-based ones, especially Amazon) should respond as well.

New Generation Kindles Are the Fastest-Selling Kindles Ever and Already the Best-Selling Products on Amazon

New Kindles start shipping to customers today–two days ahead of previously announced release date

[…] reality that iPad is not cannibalizing single-purpose e-reader sales, so the FUD described in my Undermining E-Ink and single-purpose E-readers [Aug 23, updated till Sept 17 and beyond] could have very little effect on the […]